Korean steel producer POSCO PKX reported impressive results for first-quarter 2016 with net income increasing 5.4% year over year to KRW 353 billion ($0.30 billion). The improvement was driven by cost reduction and share of profit from equity-accounted investees.Net earnings per share were KRW 1,011.5 or US$0.85 per American Depository Receipt (“ADR”).RevenuesPOSCO’s top-line performance was weak in the quarter, as revenues of KRW 12,461 billion ($10.4 billion) decreased 17.5% on a year-over-year basis.Crude steel production totaled 9.064 million tons, down from 9.183 million tons in the year-ago quarter. Finished product sales grew 2% year over year.MarginsIn the quarter, POSCO’s cost of sales declined 17.9% year over year. As a percentage of total revenue, cost of sales was 87.6% versus 88.1% in the year-ago quarter. Gross profit margin inched up 50 basis points (bps) to 12.4%. Selling and administrative expenses decreased 17.3% to KRW 882 billion ($0.74 billion).Operating profit decreased 9.7% year over year to KRW 660 billion ($0.55 billion) while operating margin was up 50 basis points to 5.3%.Balance Sheet and Cash FlowExiting first-quarter 2016, POSCO had cash and financial goods balance of KRW 8,514 billion (US$7.5 billion), compared with KRW 8,686 billion ($7.4 billion) recorded at the end of the preceding quarter. Non-current liabilities decreased 3% to KRW 14,759 billion ($12.9 billion).OutlookIn 2016, POSCO expects consolidated revenues to be approximately KRW 58.7 trillion. Finished product sales are estimated at roughly 35.3 million tons, while crude steel production is projected to be nearly 37.2 million tons. Consolidated investments are likely to be KRW 2.8 trillion.With a market capitalization of $17.6 billion, POSCO presently carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the steel industry include AK Steel Holding Corporation AKS, Companhia Siderúrgica Nacional SID and Schnitzer Steel Industries, Inc. SCHN. All these stocks hold a Zacks Rank #2 (Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AK STEEL HLDG (AKS): Free Stock Analysis Report CIA SIDERUR-ADR (SID): Free Stock Analysis Report POSCO-ADR (PKX): Free Stock Analysis Report SCHNITZER STEEL (SCHN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research